Hawaii Senate To Propose 10-Year Extension On Rail Tax

The Hawaii Senate is expected to offer the House compromise legislation that would provide continued funding for Honolulu’s troubled rail project.

The proposed amendment will call for extending the 0.5 percent surcharge levied on Oahu’s general excise tax for 10 years from 2027 until 2037, according to well-placed sources at the Capitol who insisted on anonymity.

But instead of receiving 90 percent of the surcharge, as it does now, Oahu would get 80 percent. Nineteen percent would go to the State Highway Fund and 1 percent would go to the state Department of Taxation for administrative purposes.

Additionally, unless Hawaii, Maui or Kauai county elect to levy a GET surcharge, the highway fund money could not be used for those particular counties. It’s a way of satisfying the concern of Oahu legislators that their constituents should not have to pay for another island’s roads.

The big question is whether the House will go for the idea, or even seek to negotiate further. Rep. Sylvia Luke, chairwoman of the House Finance Committee, has been consistently opposed to giving Honolulu Mayor Kirk Caldwell much more money for the rail project.

The rail guideway near Aiea and Aloha Stadium in November.

Cory Lum/Civil Beat

The conference draft for Senate Bill 1183 could be presented as early as Monday, when negotiators for the Senate and the House might hold their first conference committee meeting.

The most recent draft of the Senate bill, crafted by Luke, extends the Oahu surcharge by only two years, which she said would give the city an additional $1.2 billion. But Caldwell said that amount would fall woefully short of completing the full route — 20 miles, 21 stations — from East Kapolei to Ala Moana.

It’s believed the total cost of construction could be $10 billion.

There is also the fear that the Federal Transit Administration will pull its $1.55 billion funding for the project. The city is required to come up with a funding plan for the federal government by April 30, which falls two days after House and Senate conferees must strike a bargain on SB 1183.

The revised bill, known as a conference draft, leaves intact an important part of Luke’s draft legislation: a requirement that the City and County of Honolulu must lift its ordinance prohibiting the use of county money for rail. Legislation to that effect has already been crafted, although its unclear when a City Council vote might come.

That could result in property taxes being used to help fund rail, even though the mayor and council are loath to do so.

If the spending ban is not lifted by Dec. 31, SB 1183 would be null and void.

On Thursday, Caldwell’s office announced that the mayor has introduced a bill to the City Council granting final authority to extend the GET surcharge if the Legislature gives its approval.

According to the sources at the Capitol, the 25-member Senate has the votes to approve the amended bill while the 51-member House is more difficult to count.

House Speaker Joe Souki has been a strong supporter of finishing the rail project as planned, and he has publicly praised the leadership of Caldwell.

Senate Bill 1183 has evolved in multiple ways since its introduction and drawn countless testifiers.

Cory Lum/Civil Beat

By contrast, Luke and Sen. Jill Tokuda, chairwoman of the Senate Ways and Means Committee, believe the mayor has intentionally misled legislators and damaged any trust they might have in the city and the Honolulu Authority for Rapid Transportation.

Luke and Rep. Henry Aquino are the House conferee co-chairs on SB 1183, while Tokuda and Sen. Lorraine Inouye are the Senate co-chairs.

SB 1183 could well go down to the April 28 deadline, and sticking points will likely involve how the surcharge is split.

If lawmakers do not agree on the amended bill, the Senate could still adopt Luke’s version, which is a clean bill in that it requires no further rewrites to be sent to the governor.

Or, the bill could die.

But, with the death of two other measures Thursday that could have led to establishing a surcharge on residential investment properties and visitor accommodations to increase funding for public schools, extending the rail surcharge may have become more palatable to some legislators.

And, with the demise of the aid-in-dying measure that died earlier this session, some lawmakers heard from constituents unhappy that the measure was being shelved without a vote. They are feeling pressure to act.

Rep. Sylvia Luke, left, and Sen. Jill Tokuda, the money chairs, have long opposed giving Honolulu Mayor Kirk Caldwell all he has asked for to fund rail.

Cory Lum/Civil Beat

Still, hard feelings between the chambers linger, as illustrated by what happened with the education funding bills that were strongly pushed by the Hawaii State Teachers Association.

In a showdown Thursday afternoon, Rep. Justin Woodson rejected the urgent pleas of Sen. Michelle Kidani to pass Senate Bill 683, which faced a Friday deadline because it would have asked voters to amend the Hawaii Constitution.

Woodson said the House had too many legal and financial concerns about the bills. Kidani argued that the bills would prevail in court and that fiscal differences could be worked out in the second measure, Senate Bill 686, next week.

Kidani was so upset that she gaveled to a close the conference committee and stormed out of the room, leaving an aid to retrieve the paperwork, eyeglasses, nameplate and gavel she left on the table.

Featured Video

New Video Of Translocated Hawaiian Monk Seal Pup Kaimana

Get Civil Beat's free morning newsletter to stay informed.

Sorry. That's an invalid e-mail.

Thanks! We'll send you a confirmation e-mail shortly.

And don't worry, we hate spam too! You can unsubscribe any time.

The only news outlet in Hawaii dedicated to public affairs reporting.
Our mission is to engage and educate the community on important public issues through in-depth reporting, explanatory and investigative journalism, analysis and commentary.

Best Overall News Site

Civil Beat has been named the best overall news site in Hawaii for the 7th year in a row by the Society of Professional Journalists Hawaii Chapter.